Subscribe

Do presidential candidates' tax proposals matter?

Candidates' tax proposals offer a window into their opinions on tax. While the proposals will likely not pass as is, the candidates' opinions will shape discussion in Congress.

  • close
    In this Monday, Sept. 28, 2015 file photo, Republican presidential candidate Donald Trump talks about his tax plan during a news conference in New York. Candidates' tax proposals will never pass exactly as is, but their opinions about tax will help shape discussion in Congress.
    Julie Jacobson/AP/File
    View Caption
  • About video ads
    View Caption
of

The presidential election is nearly a year away, but many candidates have already rolled out detailed tax reform plans. On the GOP side, we’ve seen proposals from Jeb Bush (the subject of a rigorous Tax Policy Center analysis ), Marco Rubio, Ted Cruz, and Donald Trump, among others. Among Democrats, Hillary Clinton and Bernie Sanders have begun to lay out their tax proposals. But should we really care at this stage?

The short answer is “yes”, although there may be reasons to think not.  For instance, we all know that any big idea proposed by a candidate during the nomination process, whether for tax reform, health care, or any other public policy is aimed at attracting the most committed voters of his or her party’s base and has a zero probability of ever being enacted as proposed.

Why, then, should we pay attention to a tax reform plan when a candidate’s top priority is pandering to party voters and not real policymaking? Why not simply regard any plan, regardless of how detailed and well considered, as mere electioneering?

Recommended: Top ten highest rated CEOs of 2015 are not the ones you would expect

There are two reasons: First, while the President does not make tax law—or any law for that matter—his or her views will be important in shaping the tax reform debate in Congress. In this regard, the President’s veto pen is no small instrument of power in a divided Congress.

Second, and more important, campaign tax plans tell us a lot about a candidate’s priorities. Details certainly matter, and we can learn a lot about how well candidates understand tax issues by reading the fine print and listening to their own descriptions of their tax programs. But the real value is in the major thrust of a candidate’s proposal. How would the plan distribute tax burdens across income groups? Would it make the federal government’s deficit better or worse? How might it affect incentives to work, save, and invest? Even without getting into the weeds, reviewing campaign proposals can reveal a lot about the candidates, even if their specific details will never become law.

After all, candidates can’t easily run away from their basic tax reform ideas after they are elected and usually don’t try. Plans proposed during the campaign signal a commitment that we should take seriously, especially in the first two years of a president’s term. Candidate Ronald Reagan proposed across the board individual income tax cuts in his 1980 campaign, and delivered on his promise with the Economic Recovery Tax Act of 1981. Among its many provisions: a cut in tax rates that reduced the top rate from 70% to 50% over a three-year period. Similarly, candidate George W. Bush in 2000 proposed further broad tax cuts, and the Congress subsequently enacted the Economic Growth and Tax Relief Reconciliation Act of 2001, reducing tax rates to a top rate of 35% after a phase-in period.

This article first appeared at TaxVox.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on taxvox.taxpolicycenter.org.

About these ads
Sponsored Content by LockerDome
 
 
Make a Difference
Inspired? Here are some ways to make a difference on this issue.
FREE Newsletters
Get the Monitor stories you care about delivered to your inbox.
 

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK